Why all travelers should earn transferable credit card points

By DFB Guy On Jan 2, 2024

If you’re looking to up your travel game in 2024, there’s one important strategy you can pursue: Focus on earning (and then redeeming) transferable credit card rewards.

Transferable points are, simply put, the most valuable type of currency to earn in the points and miles world. This is entirely due to their versatility. American Express, Bilt, Capital One, Chase and Citi offer rewards credit cards with points you can transfer to various flight and hotel partners.

This can be especially valuable when you hope to travel in a premium cabin or want to minimize the number of points or miles you redeem for an award. Instead of being limited to a single airline (and its partners) or one hotel program, you can leverage your rewards to book the best available option for the lowest possible price.

And if you’re looking to optimize your redemptions this year, learning how to transfer your credit card rewards can be one of the most important steps.

Here is a guide on which cards earn transferable points, when you should transfer points, and which airlines and hotels partner with each program.

Why are transferable points so valuable?

In short, transferable point currencies offer flexibility when it’s time to use your rewards to book travel. For example, if you have a large stash of American Airlines AAdvantage miles, you can only redeem your miles on American and its partners. However, you have many more options if you have a big balance of Chase Ultimate Rewards points. Here are just a few:

You could also transfer points to the World of Hyatt for luxurious hotel stays.

You’re in the driver’s seat, as you can hold on to your hard-earned rewards until you find a specific trip you want to book.

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

When should you transfer points?

There are seemingly infinite ways to use your points — flights, hotels, gift cards, merchandise and more. It can be quite complex. While you shouldn’t consider your loyalty program account balances as long-term investments, you should ensure that you spend your points just like hard-earned money: with strategy and efficiency. It becomes critical to determine when to transfer points to partners versus redeem them in other ways.

When you want to redeem your transferable points on flights, there are several ways to go about it. You can purchase them through the travel site specific to the bank (like the Chase Ultimate Rewards portal or Amex Travel), or you can transfer your points to a frequent flyer program and book flights based on that program’s award rates. While your end goal is the same — book a flight using your rewards — the costs can vary widely.

If you need to book a last-minute flight (for a spontaneous trip or due to a family emergency) or are looking at a premium-class ticket or luxury hotel room with a high price tag, transferring your points can make for a fantastic redemption.

For example, I’m taking a trip to the Philippines next March, and our first three nights are at the Grand Hyatt Manila. Booking directly through Hyatt would set me back 49,168.77 Philippine pesos (roughly $882 at current exchange rates, or $294 per night).

Meanwhile, as a Chase Sapphire Reserve® cardholder, my points are worth 1.5 cents apiece when used directly through Chase Travel. Given slight differences in paid rates, I’d need to use nearly 60,000 points for the stay.

However, since I can transfer Chase points to my World of Hyatt account at a 1:1 ratio, I can book that same room for just 36,000 points (12,000 per night).

This means that my Chase points are worth 2.45 cents apiece — well above our most recent valuations.

Now, it’s worth noting that booking a flight directly with an airline or via a credit card portal means you’d earn miles on this flight (though you generally won’t earn rewards in hotel loyalty programs for card portal bookings). However, in many situations, those earnings pale in comparison to the savings you get by transferring points.

Just be aware that once you transfer your points to a given loyalty program, it’s not reversible. If you cancel your trip, your points or miles will be refunded to the airline or hotel program, not the credit card currency.

So, what kind of points can you earn to eventually transfer to your favorite airline program? Let’s dive into the five most well-known credit card rewards currencies so you know your options.

American Express Membership Rewards

American Express Membership Rewards points are a favorite transferable points currency, with a value of 2 cents per point according to TPG’s latest valuations. These points can get you some incredible awards thanks to its array of transfer partners, including All Nippon Airways (ANA) Mileage Club and Delta SkyMiles — both unique to Amex.

It’s also worth noting that American Express offers frequent transfer bonuses to its airline and hotel partners; the last 12 months alone have seen a variety of individual offers from Air Canada Aeroplan, Avianca LifeMiles and Singapore Airlines KrisFlyer.

Note that these are sometimes targeted, so keep your eye on your account for these offers to pop up.

With a variety of options to use these points, maximizing Membership Rewards can feel a bit difficult, so refer to our guide if you need help. Of course, before you redeem American Express points, you first need to earn them. Here are the most popular cards that earn Membership Rewards points:

While many of these have lucrative welcome offers, you could be targeted for an even higher bonus through the CardMatch tool (offers subject to change at any time). And don’t forget to add Amex Offers to your card(s), which can earn you thousands of additional bonus points or save you money on select purchases.

Finally, you can also use Rakuten to earn bonus points when you buy items online. This online shopping portal partners with thousands of retailers to award you bonus cash back for your purchases. However, you can elect to earn Membership Rewards points instead. You can sign up here and earn a one-time bonus of $30 by spending at least $30 at participating merchants in the first 90 days of joining.

Bilt Rewards

Bilt Rewards (TPG founder Brian Kelly is a Bilt advisor and investor) allows cardmembers to earn points for paying rent, which is great news since renting can amount to thousands of dollars spent per year. Although Bilt Rewards is a new entrant to this competitive space, the program already offers an impressive list of transfer partners, including Turkish Miles&Smiles and World of Hyatt. It’s also the only transferable points currency that allows transfers to American AAdvantage. Most recently, it added Avianca LifeMiles.

Bilt offers one credit card: the Bilt Mastercard® (see rates and fees). Cardmembers enjoy 1 point per dollar spent on rent (on up to $100,000) without the transaction fee, 2 points per dollar spent on travel (airfare, hotels, cruises and rental cars) and 3 points per dollar spent on dining. You need to make at least five transactions each month to earn points. Best of all, the Bilt Mastercard has no annual fee.

Consistent with the other major transferable point currencies, Bilt Rewards occasionally offers transfer bonuses, often during its monthly Rent Day promotion.

Capital One miles

Capital One entered the market of transferable points and miles in 2018. While Capital One cards had long been known for their simple, fixed-value award options, the issuer upped its game by adding over a dozen transfer partners to some of its most popular cards — and the value proposition has only grown over the years.

The Capital One Venture X Rewards Credit Card launched in November 2021, around the same time as the first Capital One Lounge began welcoming travelers at Dallas Fort Worth International Airport (DFW). Two more locations have since opened — at Washington D.C.’s Dulles International Airport (IAD) and Denver International Airport (DEN).

Finally, the Capital One Venture X Business card hit the market in September 2023, offering an incredible welcome bonus for small businesses.

Popular Capital One transfer partners include Air Canada Aeroplan, Avianca LifeMiles and British Airways Executive Club. There are also occasional transfer bonuses. I used one in 2022 to book an American flight using British Airways Avios that would’ve set me back over $1,000, while another staffer used a bonus to get a value of more than 5 cents per mile on a redemption through Flying Blue.

Here are the cards that currently earn transferable Capital One miles:

The information Capital One Spark Miles Select has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

If you’re sitting on a stash of Capital One miles, transferring them to airline partners can unlock some great awards. For full details on these options, check out our guides on how to transfer Capital One miles and when it makes sense to transfer instead of redeeming at a fixed value.

Read more: Best Capital One credit cards

Chase Ultimate Rewards

Chase doesn’t have as many cards or transfer partners as American Express, but Ultimate Rewards points are still quite valuable. While many travelers can’t open too many new Chase cards due to the issuer’s 5/24 rule, many argue that Ultimate Rewards is the best transferable points program out there. You can transfer these points to 11 airlines and three partners, all at a 1:1 ratio — including Air Canada Aeroplan, United MileagePlus and World of Hyatt. Chase is also the only program to partner with Southwest Rapid Rewards, though you may get better value for your Ultimate Rewards points by booking Southwest flights directly through Chase Travel.

Here are the cards that earn fully transferable Ultimate Rewards points:

It’s worth noting that two additional personal cards (the Chase Freedom Flex and Chase Freedom Unlimited) and two small-business cards (the Ink Business Cash® Credit Card and Ink Business Unlimited® Credit Card) participate in the Ultimate Rewards program. However, to transfer points earned from those cards to partners, you must have one of the three “premium” cards with an annual fee linked above and then combine your Ultimate Rewards points into that account.

Related: The best Chase credit cards

Citi ThankYou Rewards

Citi also has a transferable currency with its ThankYou Rewards program. While most of Citi’s transfer partners are international carriers, you can still get tremendous value from your points by leveraging alliances and partnerships. That means you can use a program like Avianca LifeMiles to fly on United or a program like Virgin Atlantic to fly Delta. Citi has even offered transfer bonuses for a handful of its partner programs in the past, including Avianca and Virgin Atlantic.

One TPG writer even believes it’s the most underappreciated flexible currency out there.

Currently, only a single card is available that offers transfers to all of these programs: the Citi Premier® Card (see rates and fees). (Note that if you’re still holding on to the Citi Prestige® Card — which is no longer open to new applicants — you also have the full transfer benefits.)

That said, like Chase Ultimate Rewards, you can combine your Citi ThankYou Rewards points into a single account for select products, allowing you to effectively “convert” your fixed-value earnings from cards like the Citi Rewards+® Card (see rates and fees), Citi Rewards+℠ Student Card or Citi Double Cash® Card (see rates and fees) into fully transferable ThankYou points.

The information for the Citi Prestige and Citi Rewards+ Student Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Read more: The best Citi credit cards

Bottom line

Earning and burning points can prove to be a bit of effort, and that’s certainly the case with transferable point currencies from Amex, Bilt, Capital One, Chase and Citi. However, shifting from using your points directly for travel to transferring them to airline or hotel partners is one of the most critical steps to take when you want to extend the value of your rewards. It also provides immense flexibility when you need to book something last minute, as you’re not locked into a single rewards program.

It may take some time to do so, but when you can take trips on Singapore Airlines’ A380 suite, ANA’s Room business class or British Airways’ 777 first class, it makes all of the effort worth it.

Check out our best travel credit cards for more of our top choices of cards that offer transferable rewards.

See Bilt Mastercard rates and fees here.
See Bilt Mastercard rewards and benefits here.

car

Source link